We have been keeping a close eye on Chile this 2017 election year to see the results of a much-anticipated showdown between conservative billionaire Sebastián Piñera, and center-left Senator Alejandro Guillier. The election results came out in favor of more conservative economic policies, shifting the world’s top copper-producing country to the right – a move recently being made by other Latin American nations. With almost all the votes tallied, Piñera, the former president of Chile, took the lead with 54.6 percent of the votes, leaving Guillier with 45.4 percent of the votes.
Piñera’s Promise for Economic Growth in Chile
Like in most countries, the economic policies of the political party in place heavily influence how well a business will do in a society. This is especially true for the economic changes expected from different parties in Latin America politics. Important to foreign investors are the effects a new party will have on their businesses and what kind of economic growth to expect for their business to thrive in. So what should we expect from Piñera? What does he stand for and how will this change business in Chile?
If you are not aware of what kind of economy Piñera inherited from Bachelet, here is a rundown for you to understand why the country shifted its sights back to the former president:
As mentioned before, the backbone of this economy has always been its heavy production and business in the mining of copper. Recently, Chile was hit with a double whammy of lower prices and lower demand for the lucrative commodity. This brought on an economic slowdown in the country that President Michelle Bachelet was not able to revive during her administration. You can blame it on bad luck or bad policies, but regardless of the reasons, she was not able to keep the majority of Chileans happy as the economy dwindled.
Harvard-educated Piñera steps in and proposes slashing taxes on business to help kickstart growth and bring more opportunities and money into the economy. He also promises to launch a 4-year spending plan of $14 billion USD on investments in infrastructure to revitalize growth during this economically slow period.
Piñera’s Effect on Business in Chile
Although many opposed Piñera for his lack of emphasis on the more socialist ideals that his opponent held, others are very excited for the capitalist taking charge this next presidential term. Will this conservative billionaire bring change to the Chilean economy? The markets think so. After his win on Sunday, the market-favorite results saw a soaring Chilean peso and an increase in Chile’s IPSA stock index. The growth in investor confidence surely is aligned with Piñera’s economic plan to revive what was a sluggish economy. As for what the future holds, only time will be able to tell us. However, so far, things are looking up for those interested in doing business in Chile. A stronger economy, promised by Piñera, will provide favorable conditions and more opportunity to successfully do business in Chile.
All in all, the balance of powers have shifted in this growing Latin American country and we are excited to see where this new president will lead Chile. The switching of parties this year helps keep all sides in check to strive for a better government for all. We will continue watching the Chilean economy as the promise for economic growth is supposedly underway for the Andean nation.
If you are interested in making the most of the expected growth coming to the Chilean economy, reach out to our team of local and expat professionals dedicated to helping investors do business in Latin America. Contact Craig at [email protected] for more information on how to start and grow your business in Chile.